LCD panel makers are expecting a banner year in 2008 thanks to the
fast-approaching switch
from analog broadcasts to digital broadcasts due in February,
2009. LCD makers are expecting a record year with shortages in the
LCD market keeping demand for panels up.

The LCD panel market looks so good for 2008 that the Wall
Street Journal reports many of the LCD industries biggest panel
makers are greatly increasing
their capital spending in 2008 to increase production capacity
for LCD panels.

Samsung announced it intends to increase its capital spending to
3.7 trillion won or $3.9 billion USD. This figure represents double
the capital spending from Samsung last year. Sharp also plans to
increase its capital spending with 197 billion yen, or about $1.85
billion USD earmarked.

The market projections from several research companies are
predicting strong growth in the LCD market in 2008. iSuppli is
forecasting revenue of $82.1 billion USD this year, a 14% increase,
for the LCD industry.

The downside to the increased capital spending in 2008 will be
felt in 2009 when the increased production capacity makes for an
oversupply in the market. This excess of LCD panels is expected to
hurt the LCD makers in 2009 by driving prices down. Market-research
firm WitsView general manager Henry Wang told the Wall Street
Journal, “Currently, I'm expecting an oversupply in 2009, but
it could come earlier.” Some analysts are saying the oversupply
could come as early as Q4 2008.

LCD panel makers have been scrambling over the last year to build
alliances with competitors to allow for lower production costs and to
meet consumer demand for LCD panels.